GBP

Interesting take on GBP from MNI FX Bullets

BOE: SocGen has become latest bank to push back its rate calls from
May -- joining BarCap, Citigroup, Nomura, RBS, BNP Paribas and JP
Morgan. In his latest note, UK economist Brian Hilliard has changed his
UK Rate Hike call from May to Aug following the weaker than expected
inflation reading and ahead of next Wednesday's GDP figure.

April MPC minutes show that members are becoming increasingly concerned about the
weakness of growth. "The key sentence in the BoE MPC minutes was in the
paragraph covering the views of the undecided members", says Hilliard.
It said "the news over the month about demand and activity had probably
been to the downside. An increase in Bank Rate in current circumstances
could adversely affect consumer confidence, leading to an exaggerated
impact on spending." SocGen now expect the MPC to wait until the
August meeting to hike by 25bps.


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Ashraf

UK public finances for March are also due and being the last month of the tax year Public Sector Net Borrowing is expected to have increased from Februarys 10.3bn to 18.7bn, however the figures are expected to come in under the Chancellors annual borrowing forecast of 146bn. The health of the UK consumer also comes under scrutiny with expectations of a slight improvement in retail sales for March after Februarys dreadful number. Expectations are for a decline of 0.4%, an improvement on Februarys 1% decline. Key levels in EURGBP are 2010 highs at 0.8940, and on the GBPUSD at 1.6460, the 2010 highs with a break targeting 1.6780.

By KM - AshrafLaidi.com Staff